TMT Deals In CEE: Special Focus On Tech Companies

• Sector Resilience: Despite tight funding conditions, TMT remains the top sector for M&A, driven by technology innovation and the ongoing wave of digital transformation.
• Value Creation and Expansion: Recent key acquisitions highlight sustained interest from financial investors, with targets strategically positioned to capitalize on market leadership and drive international expansion.

The TMT sector remains at the forefront of introducing new innovative technologies in CEE, sometimes earlier than their Western European counterparts. This has driven growth in digitalisation, mobile telecommunications and broadband development. Fuelled by EU-driven funding and private investment aimed at upgrading infrastructure and enhancing connectivity, CEE countries have embraced digitisation. Across the region, TMT remains a standout performer in M&A thanks to this growing digital transformation and increasing demand for technology-driven services.

"As 5G deployment continues to expand, telecom companies are investing in strategic partnerships to modernize their networks, boost revenue and offer advanced services," says Eva Talmacsi, Partner at CMS in the UK & CEE. "Simultaneously, technology companies benefit from the region's talent pool and thriving tech hubs, as well as their financial competitiveness, making it an attractive target for global investors. Economic resilience and strategic geographic positioning also drive M&A activity in these sectors."

As businesses in the region shift to cloud computing, data analytics, and AI, international investors are increasingly targeting local technology firms for their expertise and potential. "We have also seen an increased level of activity amongst regional players," adds Eva Talmacsi. "In addition, the EU's push for digital and green transitions has spurred growth in related industries, providing significant opportunities for telecom and technology consolidation."

Last year, TMT deals in CEE were characterised by strategic acquisitions, sectoral consolidation, and growing interest from both US and Middle Eastern investors. Consolidation has been particularly evident among telecom companies seeking to achieve economies of scale and integrate new technologies, such as the Internet of things (IoT) and 5G. This trend aligns with a broader strategy of trying to compete with multinational operators and cater to increasing demand for high-speed internet and digital services.

As businesses in the region shift to cloud computing, data analytics, and AI, international investors are increasingly targeting local technology firms for their expertise and potential. "We have also seen an increased level of activity amongst regional players," adds Eva Talmacsi. "In addition, the EU's push for digital and green transitions has spurred growth in related industries, providing significant opportunities for telecom and technology consolidation."

Last year, TMT deals in CEE were characterised by strategic acquisitions, sectoral consolidation, and growing interest from both US and Middle Eastern investors. Consolidation has been particularly evident among telecom companies seeking to achieve economies of scale and integrate new technologies, such as the Internet of things (IoT) and 5G. This trend aligns with a broader strategy of trying to compete with multinational operators and cater to increasing demand for high-speed internet and digital services.

"TMT features significantly in transactions," says Juraj Fuska, Partner at CMS in Slovakia. "Within the sector, software remains a major attraction. Why? Because of the development of technology, digital transformation is in every area of business and public activity: e-commerce, e-administration, there's a constant demand for more and more connectivity."

US private equity firms and tech companies have expanded their CEE footprint, attracted by competitive valuations and access to skilled tech talent. Meanwhile, Middle Eastern sovereign wealth funds have shown heightened interest in tower companies, data centres, IT infrastructure, and green energy-linked tech projects, viewing CEE as a high-growth alternative to Western Europe. Strategic partnerships in AI, fintech, and cybersecurity have also emerged as key themes, driven by the desire to innovate and adapt to digital disruption.

According to Velizar Velikov, Head of M&A Database at EMIS, "We had large telecoms transactions in 2023 with strategic investors from Saudi Arabia and the United Arab Emirates (UAE), which significantly elevated overall values. Both were cross border transactions - mega deals of more than 1 billion euros, and they substantially boosted market activity, alongside notable transactions in Hungary and Poland. The Saudi Telecom Company acquired telecoms towers from United Group, and Emirates Telecommunication Group bought more than half of the telecoms assets of PPF, the Czech private equity group. In 2024, preparations and negotiations gained momentum for additional transformative TMT deals, particularly in telecoms and data centre assets, setting the stage for these opportunities to materialize in 2025."

Significant Middle East investors are still penetrating the market, suggests Clemens Grossmayer, Partner at CMS in Austria. "They are still hungry," he says. "They have very substantial funds and are very opportunistic: wherever they see an opportunity, they're willing to invest. They see opportunities in CEE right now that were probably not here a couple of years ago."

Tetyana Dovgan, Partner at CMS in Ukraine, adds: "Telecom and tech are driving deal activity in CEE because these sectors are completely essential for growth, especially during times of uncertainty. Standout deals are major acquisitions by NJJ Group in Ukraine: Lifecell from the Turkish company Turkcell and Datagroup-Volia from Horizon Capital. Telecom companies are expanding their networks deploying 5G which supports faster, more reliable connections between businesses and consumers. Tech companies are also thriving because they help other industries to adapt to diverse challenges, such as remote working, supply chain disruption, and most importantly, digital security needs. There are numerous acquisitions and expansion in the region."

In a cross-sectoral context, she points to biotech and life sciences. "They are increasing technology to speed up drug research development," she says. "For example, Roche has focused on digital health innovation, acquiring numerous tech-driven companies in diagnostics and data solutions, particularly in CEE."

Among tech companies, deals feature in tech healthcare and tech energy, as well as tech life sciences. In the tech healthcare space, standout deals include acquisitions focused on digital health platforms and AI-powered diagnostic tools. These companies attract interest because of their ability to transform patient care and streamline healthcare delivery. "The expansion of tech healthcare accelerated during the pandemic," says Marija Teaić, Partner at CMS in Serbia. "It has remained strong ever since. Investment activity in the sector is mostly due to the need for innovation, such as tele health, digital health solutions, and mental health support."

In tech energy, the push toward sustainability has seen deals involving companies providing smart grid solutions and energy storage technologies. "These firms are pivotal for achieving decarbonisation goals, making them attractive to both strategic investors and infrastructure funds," says Eva Talmacsi. In life sciences, biotech companies are leveraging AI, especially in the R&D space. Their innovative approach appeals to multinational pharmaceutical firms seeking to diversify their pipelines by bolt-on acquisitions.